Microsoft and Adobe meet to discuss Apple, possible merger

By on October 7, 2010, 6:34 PM
Microsoft CEO Steve Ballmer met for an hour recently with Adobe CEO Shantanu Narayen, and Apple was a big part of the agenda. Neither company wants to comment on the meeting, and neither denied it occurred, but of course no large corporation ever comments on rumors or speculation.

Ballmer showed up with a small entourage of deputies at Adobe's corporate offices in San Francisco to hold a secret meeting with Narayen that lasted over an hour. That's according to The New York Times, which cited employees and consultants to the companies who did not want to be identified. There were many topics covered, including Apple and its control of the mobile phone market. Another topic was the way Apple CEO Steve Jobs blocked Flash on the company's handheld devices.

The duo also discussed how they could partner to fight back, and Microsoft acquiring Adobe was reportedly among the options. At roughly $14.5 billion in market capitalization though, Microsoft would likely end up paying anywhere between $15 billion and $20 billion. Microsoft once offered $44.6 billion for Yahoo, so this isn't entirely impossible, but we're very skeptical.

Microsoft has tried acquiring Adobe several years ago, but the potential deal never moved past informal talks as there was fear that the United States Department of Justice would block the deal on antitrust grounds. That was when Microsoft was still the only dominant force in technology; Google and Apple were not the giants they are today.

Adobe and Microsoft collaborate on many fronts. In recent years, however, there has been friction between the two, especially ever since Microsoft released Silverlight to compete with Flash and since Adobe forced Microsoft to remove built-in PDF support in Windows Vista and Office 2007. It appears that Apple is the common foe that is drawing them together. The enemy of my enemy is my friend.

User Comments: 5

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LinkedKube LinkedKube, TechSpot Project Baby, said:

This is what happens when you deny people simple things Mr Jobs. Just as the world mounted a war against hitler. There will be less death here though.

MrAnderson said:

This is very intriguing and scary at the same time. MS is the slayer of competing software. At least that used to be the case. But they hardly have a nack where creative, medai and entertainment software is concerned. There were a few times they have done well with effort. MS used to own SoftImage, they converted it to Windows NT. It was a pawn in part of MS' plans to make NT viable; nevertheless, Softimage did flurished being one the first 3D content packages to be taken seriously on a standard PC and not a Silicon Graphics workstation..

If all this Merger stuff is true and if Adobe became just an operating arm, perhaps, left to their own design (no pun intended) and they integrated the software they have common (with a none disruptive transition - think Autodesk's Maya-Max-Softimage), I think they could be pretty darn successful.

The only problem think that could arise, is that MS might retract Adobe from other platforms and make them exclusively MS OS based. I think this would be the greatest failing for Microsoft. This would be a great opportunity for MS to break ground into other systems. Will the OS be the thing that controls the market in the future. Or is it the platform, becuase isn't that what Windows is, a platform that they build software? A platform that others build software on... What will happen?

Archean Archean, TechSpot Paladin, said:

The only problem think that could arise, is that MS might retract Adobe from other platforms and make them exclusively MS OS based. I think this would be the greatest failing for Microsoft.

I don't think it will be 'biggest failure' of any sorts, it is more of a case of good business nothing more. Look at Apple how they control what you can do with their devices, or what you can put on them.

I have been reading lots of 'surveys' with regard to Apple penetrating the campuses which in turn will give them some edge in future, however, such surveys forget one thing the world doesn't end at US or some European countries. Hence, in the longer run, Asia is the place which will decide who end up where; and for that, I think likes of MS, Google, AMD, and Intel are in far better place right now than e.g. Apple. There is one dark horse though, and i.e. Open Source software / community.

Now back to Adobe + MS, IMHO MS probably is better off not buying Adobe, because some of their products have become more of bloatware. I'll give you one example, no one amongst the people I know now use Adobe's Acrobat reader, and I'm talking about reasonably tech savvy people here. However, I see no harm if it is more of collaborative relationship for the benefit of these two companies.

tengeta tengeta said:

Microsoft might actually sell Photoshop and Flash at cheaper prices... heh.

But seriously, that would be a very awkward "merger".

MrAnderson said:

@ tengeta - MS? make them cheaper... Not sure they would. I agree it would be very "awkward". But coventures and technology sharing would be interesting.

@Archean - I'm tech savy and yes I truly dislike Adobe Acrobat Reader and Writer, but I mist admit I do have a copy sitting around because I use it to view documents in spite having other free and probably lighter viewers.

My point is, if they did merge and MS made adobe suites windows only it would weaken Adobe's impact in the market. It might give Apple an opening to make its own Creative Suite, and Apple is a company that will do it if it has to. Final Cut has lost little or no ground to Premeire in spit of it not getting any major updates till recently. The are fully able to create other creative applications should the need arise. I believe it would not be good to *not* continue to support more than one platform at this time.

I like Adobe, they are not the only company that has security issues in their software. Moreover, software gets bloated when the code base is serveral years old. They just need to start working on fixing that like other compaines with similar issue and include corrections for bloat and optimizations in their roadmap.

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